Malaysia Has One Of The World’s Highest EPF Rates, Lower-Income Workers Are Still Retiring Poor

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Former Employees Provident Fund (EPF) chief executive officer Tan Sri Shahril Ridza Ridzuan has proposed that employers contribute 15% or 16% to the EPF of workers earning below RM5,000 a month.

He said employers could pay a much lower rate for higher earners to offset this.

Shahril, who is now Axiata Group Berhad’s chairman, made the remarks at EPF’s International Social Wellbeing Conference 2026 in Kuala Lumpur on 30 September.

He was responding to a question on how lower-income and informal workers can retire with dignity.

Employees below 60 contribute 11% of their salary to the EPF.

Employers contribute 13% for salaries below RM5,000. For salaries above RM5,000, the employer rate is 12%.

Low Wages The Core Problem

Shahril said Malaysia already has one of the highest contribution rates for retirement savings.

He said wages have not grown fast enough for the past 50 to 60 years.

A small wage base means savings build slowly, whatever the contribution rate is, he said.

He praised the federal government’s work towards a progressive wage policy and said minimum wage must keep rising.

Shahril then suggested that progressive wage policy should also cover employer EPF rates.

15% To 16% Below RM5,000, 4% Above RM10,000

He asked why employers should not contribute “say 15 per cent or 16 per cent” for workers earning below RM5,000.

He said this would help lower-income workers build their savings faster.

As a hypothetical example, he said employers could contribute only 4% for workers earning above RM10,000.

He said this would also limit the size of the balances EPF manages for high earners who are already on track for retirement.

Shahril said he prefers this to giving different dividend rates to members with higher and lower savings.

He said EPF’s member base is too large for such a system.

He said it would carry a very high risk of funds flowing out from top account holders.

A smaller fund would raise costs for all members, he added, since a larger pool of assets keeps costs lower.

“Most Gig Workers Don’t Contribute To EPF”

Shahril also spoke about gig workers.

He said gig platforms do not contribute to their workers’ EPF savings. This lowers their operating costs and lets them undercut traditional businesses, including small family-run shops.

He proposed a revenue tax on gig platforms, with the proceeds used to fund EPF contributions for gig workers.

As of 5 October, no change to EPF contribution rates has been announced.

Shahril said the real debate is about wealth inequality, and whether owners of capital and business pay a fair share to the state.

READ MORE: Malaysia’s 78-Year Life Expectancy Renews Calls To Raise Retirement Age

READ MORE: Malaysians Are Living Longer, Most Can’t Afford To

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Malaysia Has One Of The World’s Highest EPF Rates, Lower-Income Workers Are Still Retiring Poor
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